The Hindu Business Line : Metals, capital goods and auto sectors worst hit

Trading highlights
Market drops below technical support levels
Declines outnumber advances in mid-cap space
Metals, capital goods badly hit

After the market mayhem witnessed in the previous week, the markets were expected to open on a cautious note this week. The BSE Sensex opened on a positive note and remained in the green for a while, before the indices tumbled. As the negative vibes emerged from the Asian markets, the bears dominated through the forenoon on Monday's trading.

The market dropped below the technical support levels, with the metals, capital goods and auto sectors being the worst affected in the forenoon. As the selling pressure intensified, all the sectors were hammered irrespective of their fundamentals. The margin pressure was said to be one of the key reasons for the market to fall like ninepins. By mid-day, the market hit the lower circuit for the index, the second time in the last two years. The trading was suspended for an hour at both the BSE and the NSE.

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During the cooling period, the statement from the Finance Minister allayed fears about problems in the stock market. And an independent statement from the securities regulator on settlements going smoothly in all major exchanges went down well with the market, once it resumed trading.

The index opened strong with value buying from mutual funds and domestic institutions.

The Sensex recovered 600 points from the day's low of 9,826. The markets remained highly volatile and the recovery was so strong that at one point of time, it was just 200 plus points down from the previous day's close. At the close, the BSE Sensex shed about 456 points (or 4.2 per cent). The worst affected were the mid-cap and small-cap indices, down by 6.38 per cent and 6.87 per cent respectively. The mid-cap advance decline were skewed in favour of declines, in the ratio of 14:1. The decline was even higher in small-caps, with the ratio being 27:1.

Sector focus

All the sectors closed in the red. The worst affected was metals, which was down 7 per cent at close. This was the third straight decline for this index. Similarly, capital goods, banks, consumer durables, oil and gas, and auto were the others that lost heavily.

In the metals space, Essar Steel, Steel Authority of India, Ispat Industries, Tata Sponge and Nalco were the ones that lost in the range of 5 to 16 per cent. Dena Bank, IDBI Bank, Corporation Bank, Union Bank of India, Bank of Maharashtra, Bank of Rajasthan and IndusInd Bank are all down by 8 to 16 per cent.

In consumer durables, Titan, Videocon Industries, Whirlpool and Blue Star dipped by 9 to12 per cent. In the oil and gas space, the worst losers are Essar Oil, GAIL, Bongaigaon Refinery, MRPL and Petronet LNG.

In auto and auto ancillaries, the stocks that declined were TVS Motors, Ashok Leyland, Escorts, LML and Tata Motors. In ancillaries, Amtek, Fag Bearing, Munjal Showa and Sundaram Fasteners lost about 7 to 19 per cent.

The gainers

In yet another Black Monday, the prominent stocks that bucked the trend are CCL Products, Marico, Geodesic Information, Nestle India, Thirumalai Chemicals and Cipla.